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Owing Real Estate as Joint Tenants

31 Jan

MetroBoston Publication Date January 31, 2013
By Attorney George Warshaw

Two or more people can own real estate together in several ways. One of the most common is as “joint tenants with rights of survivorship.”

A joint tenancy is a form of ownership by which a person’s ownership rights in property pass to one’s co-owners upon death.

Ordinarily, when a person dies the heirs must go through the probate court to obtain certification of an inheritance of real estate. Property owned or held as “joint tenants” avoids probate because the property transfer is automatic upon death.

Simply file the death certificate with the Registry of Deeds and the transfer of legal ownership become complete and noted in the official records. Nothing more is necessary to effectuate the transfer of title ownership.

A joint tenancy in real property is established by the initial words of transfer used in the deed. “I grant to Fred and Wilma Flintstone the following property as joint tenants with the right of survivorship . . . .” is how it is typically phrased.

Can one joint tenant deed his or her interest without the consent of the others? Yes. One joint tenant always has the right to transfer his or her ownership interest without the permission of the other – but the automatic inheritance right is usually lost upon the transfer. © 2013 George Warshaw.

George Warshaw is a well-known attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions. Contact him at metro@warshawlaw.com.

 

 

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Should You Add Your Name to Mom or Dad’s Deed?

25 Jan

MetroBoston Publication Date January 24, 2013
By Attorney George Warshaw

Last week we briefly discussed the tax benefits and perils of gifting real estate. One thing that most people do not consider as a gift is when a child’s name is added to a parent’s deed.

Usually a child is added to a deed to make inheritance easier or to help manage the parent’s property.  Adding one’s name to a deed can have unintended tax consequences. It is often considered a gift under the tax code!

If it is considered a gift, then the person receiving the gift receives along with it the same tax basis that the parent had in the property.

If a house is worth $500,000 and a child is added to a parent’s deed as a joint tenant with rights of survivorship, the child usually receives a gift of a portion of the parent’s ownership interest – typically a half-interest.

Keep in mind this basic estate planning rule when transferring any interest in property: a person inherits property at its fair market value; a person receives a gift of property at the same tax basis (i.e. cost + improvements) as the giver has in the property.

Check with your tax accountant, adviser or lawyer before adding someone onto a deed. The foregoing may not apply to you. © 2013 George Warshaw.

George Warshaw is a well-known attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions. Contact him at metro@warshawlaw.com.

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